And like a fighter getting pummelled in a neutral corner, Canada was looking for a way out Tuesday following the brutal Monday that saw the Toronto Stock Exchange suffer its worst one-day loss in 33 years and oil prices fall 25 per cent, their biggest drop since 1991.
The drop in stock prices was driven by fears about what ramifications the COVID-19 outbreak will have on the Canadian economy and by the collapse in oil prices because of the oil price war between Saudi Arabia and Russia.
After the markets closed, Finance Minister Bill Morneau told reporters he would release a plan this week to combat the one-two punches on the markets.
He offered no specifics.
Minister of Finance Bill Morneau speaks with the media in the foyer of the House of Commons in Ottawa, Monday following the huge fall in prices at the Toronto Stock Exchange and on the world’s oil markets. (Adrian Wyld/The Canadian Press)
“We have a strong fiscal position. We have been lowering our level of debt as a function of our economy over the last five years,” Morneau said.
“That puts us in a good position to support people as they go through challenges.”
Earlier in the week, the Bank of Canada lowered its benchmark overnight rate to 1.25 per cent from 1.75 per cent in response to the outbreak, which on Monday claimed its first coronavirus death in Canada.
Meanwhile, Jason Kenney, the premier of Alberta, whose economy is based on producing and selling oil, called the turn of events a “profound challenge for Alberta and for Canada.”
Alberta Premier Jason Kenney (seen speaking at the Indigenous Participation in Major Projects conference in Calgary on Feb. 26) says his government will do whatever it takes to rescue the province from an oil price collapse. He also wants the federal government to step up as well. (Jeff McIntosh/The Canadian Press)
The crash in prices comes two weeks after Kenney’s United Conservative government handed down a budget based on increased oil prices.
“We are in uncharted territory,” Kenny said. “We cannot project how deeply or for how long this devastating price collapse will affect us.”
There were signs that the markets were rallying on Tuesday, but the analysts say the price of both stocks and oil remain extremely volatile.
With files from CBC (Tony Seskus), Canadian Press, Huffington Post (Melanie Woods)
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